Bitcoin Steadies Near $110K as Traders Await Inflation Data, Fed Signals

Bitcoin held above $110,000 on Tuesday, supported by sustained institutional buying and cautious investor positioning ahead of U.S. inflation data that could influence the Federal Reserve’s interest rate outlook for the remainder of this year.

The crypto was last trading at $109,900, after reaching a session high of $110,237. It is up 4.2% over the past week and has remained within reach of its May 22 peak of $111,814, CoinGecko data shows.

It comes as investors await May’s Consumer Price Index report, due at 8:30 a.m. ET on Wednesday. 

Economists expect the core CPI to rise 0.3% from April, with the headline CPI up 0.2% on a month-over-month basis and 2.4% year-over-year, per MarketWatch data. Producer price data is due Thursday. 

“Markets appear to be in a holding pattern as traders await fresh catalysts—particularly U.S. inflation data that could tilt Fed expectations,” Lukman Otunuga, senior market analyst at FXTM, told Decrypt. “Meanwhile, gold remains in focus, with a technical breakout potentially signaling a renewed push toward record highs.”

Stickier inflation could delay expected rate cuts and weigh on risk assets, but so far, the market outlook remains buoyant.

Fed funds futures indicate markets are leaning toward a cut in September, with a 61% probability priced in, according to the CME’s FedWatch Tool.

“The current rally is less speculative and more structurally driven than in past cycles,” Rachael Lucas, a crypto analyst at BTC Markets, told Decrypt in a statement. “Institutional capital, ETFs, and corporate treasuries are playing a significant role in creating sustained buying pressure.”

Lucas pointed to a $54.5 million leveraged long position that recently triggered upside momentum. Support remains firm around $105,500, she said. 

Strategy, formerly MicroStrategy, now holds 582,000 BTC. Japan’s Metaplanet plans to raise $5.4 billion to expand Bitcoin reserves, while The Blockchain Group is targeting a $342 million raise, signs that demand remains elevated despite future market uncertainty.

In the ETF space, BlackRock’s iShares Bitcoin Trust (IBIT) has reached $70 billion in assets. Ethereum ETFs, meanwhile, have posted 15 consecutive days of inflows, totaling $837.5 million, per CoinGlass data.

Broader macro signals have also turned supportive, with ongoing U.S.-China trade talks, the U.K. lifting its ban on crypto ETFs, and Hong Kong advancing CBDC pilots with Chainlink.

Analysts suggest that this cycle may be evolving into a “supercycle,” characterized by shallower drawdowns and increased institutional resilience. 

“However, this doesn’t mean it’s without risk,” Lucas added. “Regulatory reversals, liquidity shortages, or competitive flows into other digital assets like Ethereum or Solana could put a ceiling on upside potential.”

If profit-taking picks up or the Federal Reserve signals a slower path to rate cuts, government bonds could regain appeal, posing a potential headwind for crypto prices, Lucas warned.

Still, price targets from firms including Bitwise and VanEck range from $180,000 to $200,000 by year-end and remain intact, assuming continued inflows and easing macro conditions persist.

Editor’s note: Adds comments from FXTM